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The federal government had threatened to cut $20 million from the hospital by Sept. 2, citing concerns of overcrowding, understaffing and the use of correctional officers, which the hospital said was necessary because patients were attacking staff.

Several patients come to the center via jail or court order.

The state on Thursday approved a plan to create a mental health wing at the state prison.

It will decertify 20 beds at Riverview, allowing it to continue using correctional officers. But it will no longer get Medicaid or Medicare reimbursements for those beds.